Brunswick Cuts 750 Jobs
and Announces Stock Buyback

1 Oct 1998

Thursday October 1, 1998 Brunswick Corporation announced it is consolidating some operations and eliminating
750 jobs to cut costs as a result of the economic conditions in Asia and other emerging markets.

Of the job cuts, about 90 percent will be in Asia. Brunswick also will sell a plant
that make pinsetters in China, as well as 15 bowling centers in Asia, Brazil and
Europe.

Previously announced plans to consolidate distribution warehouses in the U.S.
included closing a facility in Effingham, Ill., and shifting that work to Olney.

Some bicycle assembly operations will be shifted from Brunswick's facility in
Olney IL to a new plant opening in Mexico.

BC will take a pretax charge of about $60 million in the third quarter ended September 30, 1998.
On an after-tax basis, the charge is about $40 million or 40 cents per share.

Changes in Brunswick's bowling division account for about 80 percent of the
charge, while outdoor recreation group projects account for the balance, the
company said. About 55 percent of the charge covers severance costs, lease terminations and
other items, while 45 percent relates to asset write-downs and dispositions, the
company said.

``We continued to see solid double-digit sales growth from the vast majority of
our businesses in the third quarter. This has enabled us to offset the decline in
business units affected by Asia,'' said Chief Executive Peter Larson in a
statement.

In an interview, Larson said, ``This really is an Asian impact charge. Whether it
is in bowling or in the outdoor group, that is the focus of this.''

By the end of the year, Brunswick said it will take the following steps:

-- Sell, close or otherwise dispose of a bowling pin-setter factory in China;

-- Close or sell 15 retail bowling centers in Asia, Brazil and Europe;

-- Speed up closure of a pin-setter plant in Germany, with its operations moving
to a new plant in Hungary;

-- Close seven warehouses scattered across the United States, reducing the
total of those facilities to 15;

-- Transfer some bicycle assembly work from a plant in Olney, Ill., to a new plant
in Mexico.

Cost-cutting steps are expected to save about $18 million in 1999.
``Approximately 750 positions in the company's capital equipment and products
divisions and international retail centers are being eliminated,'' Brunswick said.

On a segment basis, recreation generated 35 percent of second-quarter sales of
$1.1 billion, but just 20 percent of operating earnings of $143.9 million on the
quarter. The bulk of sales and operating profits recently has come from its
marine business.

On the boat business, Larson said, "The picture is positive ... and not only from
our perspective, but more importantly from the view of retailers. The business is
very good. The undelivered orders that they have are very strong. There are no
indications that we can see that the business is softening."

He said declines in the sales by other builders of small fishing boats -- a
business that Brunswick largely exited three years ago -- have not hurt the
company's outboard motor sales.

"The areas where we are most focused -- cruisers and yachts and salt-water
fishing -- are growing at double-digit rates ... So we have positioned ourselves
where the consumers are. The engines to a great degree follow that," Larson
said.

Larson said, "More than 80% of the business at Brunswick is in terrific shape,
and recording double-digit growth. The company's difficulties are centered on
its bowling and camping equipment segments." He reported the new initiatives
are designed to "change the way the cost profile of these businesses in a way that-
even at current volume - they're going to be profitable." Brunswick said the
moves will save $18 million next year.

Asian Bowling

In Asia, Larson said expansion of the bowling business is meeting with
consumer support, but also facing tight credit market obstacles.

"We are not able to finance installation of lanes in Asia. So it's a capital
equipment issue, rather than a consumer issue," Larson said. "We're having
difficulty getting letters of credit out of Asia, in general, and China in particular."

"We had had a very U.S.-based manufacturing capability that was not
cost-competitive," Larson said. "As a result of these actions, we will ... have
shifted more of the manufacturing offshore and will be very cost competitive."

Stock Buyback and Stock Price

In addition to cutting operations, Brunswick said it will buy back as many as 7
million shares, or about 7 percent of its stock outstanding. That is on top of a 5
million-share repurchase program announced last October. Brunswick said that,
so far, it has spent $41 million to buy back 1.5 million shares under the 1997
program.

Analysts said waning U.S. consumer confidence, which is highly correlated to
boat sales, has contributed to a recent decline in Brunswick's stock price. The
shares were up 11/16 at 13-5/8 on the New York Stock Exchange on Thursday,
but they were down from a 52-week high of 36-1/2 set on Oct. 2, 1997.

In fact, Thursday may be the first time in months that Brunswick and Wall Street
have seen eye to eye. Brunswick's stock is down more than 60 percent for the
year. Peter N. Larson, chairman and chief executive, said investors have
"overpenalized" the company, but expressed optimism that the restructuring
would bring the price back up.

Larson said the moves should put Brunswick in a strong position in the near
term even the world economic picture doesn't improve soon. The company's
biggest weaknesses were in the camping and bowling operations, and "we took
care of them in this charge," he said.

"We are blessed with having a set of fundamentals that are very positive," he
added. In particular, he said, Brunswick is in a good position to address a
growing consumer issue -- stress on the job. He said Brunswick offers physical
outlets for stress, whether it be bowling or camping or boating, and most have
the bonus of working for families as well as individuals. Exercise equipment has
been particularly strong, Larson said.

Moody's revises Brunswick Corp Rating Outlook

Reuters North American Securities
Friday, October 02, 1998 12:42PM

NEW YORK, Oct 2 via NewsEdge Corporation - Moody's Investors Service
confirmed Brunswick Corporation's ratings following the company's
announcement that it plans a major share repurchase and has initiated a
restructuring of its global manufacturing operations.

Brunswick's ratings continue to reflect the company's strong market positions in
several segments of the recreation market and the increased diversification of its
cash flow stream through a broader product portfolio.

However, the rating also reflects the rising leverage of the company due to
acceleration of its share repurchase program and recent debt-financed
acquisitions.

Brunswick's rating outlook is revised to negative from stable.

The cyclicality of Brunswick's recreation-related businesses requires a greater
degree of flexibility relative to some other consumer product businesses.

The company's flexibility is limited at its current rating level due to sizable share
repurchases and debt-financed acquisitions.

On October 1, 1998, Brunswick announced that its Board of Directors authorized
the repurchase of up to seven million shares.

This authorization supplements the company's five million share repurchase
program to reduce dilution from shares issued under compensation plans.

The company also announced initiatives to streamline operations and reduce
costs in response to weak economic conditions in Asia and other emerging
markets.

In connection with these initiatives, the company will be recording a pre-tax
charge of $60 million.

Approximately 80% of the charge relates to bowling division projects and the
remainder to projects of the outdoor recreation group.

Brunswick is the world's largest manufacturer of outboard engines, stern drives,
and pleasure boats. The marine division represents approximately 65% of the
company's sales and earnings.

To reduce its dependence on the cyclical marine industry, the company has
been expanding its portfolio of active recreation products targeting several
segments, including bowling, camping, biking, fishing, and exercise equipment.

As a result of acquisitions and internal growth earnings from the recreation group
have increased to $116.8 million in 1997 from $50.6 million in 1995.

Although the broader product portfolio reduces the overall volatility of the
company's cash flow and earnings, active recreation products, such as
Brunswick's, are more cyclical than consumer non-durables.

Moody's noted that a higher cyclicality risk warrants overall stronger debt
protection for any given rating category. Due to debt-financed acquisitions,
Brunswick's debt/capitalization rose to 36% at December 31, 1997, from 23% at
December 31, 1997.

The rise in leverage that Moody's anticipates as a result of the share repurchase
program and the restructuring charge will weaken the company's position within
the Baa1 rating category.